Bill Bishop has been in and out of China for twenty years. He was a co-founder of financial news provider MarketWatch, which was acquired by Dow Jones.
Bishop is an insider in business journalism and financial markets, and his Twitter feed, niubi, is an excellent source of stock market insights, financial news updates and eclectic China news.
Danwei asked Bishop about where to invest money in China in 2009, his career in China, and his new venture Stock Twits.
What’s your background with China?
It is hard to believe, but next week is the 20th anniversary of my first visit to Beijing and China. I came for my junior year spring semester abroad and went to Beida (Peking University). It was an interesting time to be at Beida, and I stayed through to the end of June. I spent the 1990-1991 academic year in Taipei at the IUP center, then I lived again in Beijing for about 18 months from late 1991 to mid 1993, before going back to graduate school in Washington DC at Johns Hopkins SAIS. I moved back to Beijing in mid-2005.
What’s your history as an interpreter? Who were you interpreting for?
I was fortunate to be able to build a very strong academic foundation in Chinese, first at Middlebury and then in Taiwan at the IUP program (the one that is now in Beijing at Tsinghua University).
I used to do a fair amount of interpreting and translation. Now it gives me a headache… I interpreted for a U.S. TV network during my first visit in 1989, I worked as a translator at the Chinese Literature Press in 1992 (so I have worked in a real danwei (work unit), for the princely sum at the time of 1,100 yuan per month plus a swanky Soviet-built apartment), and simultaneously I also worked as a clipper, translator and interpreter for the Baltimore Sun Beijing Bureau.
Could you tell us a brief history of your founding and selling of MarketWatch?
We started MarketWatch inside of a company called Data Broadcasting, which sold real time stock market data and software. I joined that company out of graduate school because I wanted a job that would get me to China regularly and Data Broadcasting had a joint venture in Beijing with the State Council Information Center.
Fortunately the joint venture didn’t work out, and I ended up spending most of my time at DBC working with Larry Kramer, who was the real vision behind what became MarketWatch. We launched MarketWatch.com in October 1997, went public on the Nasdaq as the first IPO of 1999 (the fun old bubble days), survived the 2000-2001 meltdown, and finally sold the company to Dow Jones in late 2004.
I did several things at the company, from running U.S. and international business development, setting up a joint venture with the Financial Times for FTmarketwatch.com in Europe (it didn’t last through the 2001 meltdown) to running the consumer Internet business, which was mostly advertising supported.
When we sold to Dow Jones we had over 100 journalists working for us around the world and millions of readers every month. I never worked as a journalist, but I was on good terms with them and am proud that they never threw stuff at me when I walked through the newsroom.
What have you been doing in China since selling MarketWatch?
My proudest accomplishments since I came back to Beijing in 2005 are my twin girls, born almost 3 years ago in Beijing. They are my main focus right now, and have given me a perspective on things I was lacking when I lived in San Francisco. Professionally I have worked in the online game industry with a local start-up, and advised a handful of start-ups and bigger U.S. firms on their businesses here. I am mostly lying low and trying to figure out what is safe and what is going to work as the world economy looks to slide off its precipice.
China, and especially Beijing, seems to be among the safest places to be to weather the coming storm, at least right now.
What is Stock Twits and your role in it?
Along with my girlfriend I am an angel investor in Stocktwits.com. I am a big believer in the democratization of financial information, and Stocktwits (Twitter: @stocktwits) is a great leveler. Users who are smart and correct are followed and listened to, users who are wrong gets ignored. That kind of accountability has been sorely missing elsewhere, to the detriment of millions of investors. The market meltdown of 2008 should be the final proof that the mainstream financial information infrastructure － from MSM (mainstream medias) like CNBC to research analysts to hedge fund managers to brokers － is rotten if not downright malignant. Right now Stocktwits is heavily skewed towards active trading, but that should change over time. Stocktwits is perfect for the current market environment, and its real time, quick and succinct analysis and calls fit perfectly with the real time needs of traders.
The best description of Stocktwits.com I have read is here, on MSN Money.
You’re an astute observer of the financial market. What are your predictions for the stock market in 2009, and where would you invest your money in 2009 in China?
Right now I am mostly on the sidelines. At this moment I own a little bit of exchange traded fund FXP, which is effectively a 2x short of Hong Kong’s Hang Seng index. The only stock I own is Kongzhong (Kong), a leading Chinese wireless service provider. They have a new CEO, cash, a growing mobile MMO gaming business, and I think they should be a big beneficiary of the recently issued 3G licenses. It won’t take too much of an uptick in business for them to become quite profitable. And at 3 USD in the worst case I can only lose 3 USD a share…
Otherwise I have some cash and am trying to stay as safe as possible. I think we could easily see 600 on the S&P and somewhere south of 6，000 on the Dow Jones in 2009. We will likely have some crazy rallies (dead cat bounces, also known as Cantonese supper rallies) and nimble traders should do well, but the old economic model is broken and nothing like it is coming back soon. I believe investors betting on a quick recovery are missing the fact that the entire market environment has likely changed fundamentally for at least a generation, and that change — the collapse of the ponzi scheme of credit that led to our collective, hallucinatory consumption orgy — will have a negative impact not just on business directly but also on stock market multiples.
Markets tend to overshoot, both up and down, and I believe we will be on the downside for longer than any of us would like. You have to remember that most US and European major banks are basically insolvent, and until that is dealt with brutally and transparently we are going to be looking like Japan and the Nikkei, and even when we finally face up to it we will have a long road to recovery.
I think it will be a rough year in China, but I think China will weather this crisis better than the West, and that the crisis will force long-needed and long-avoided structural economic reforms and social welfare programs that will ultimately lead to higher domestic consumption and much better standards of living for every Chinese. It may be a painful process, but I don’t buy any of these coming “collapse of China” prophecies; Maybe I am a naïve optimist, but most of the pundits are always wrong in their predictions about China.
China’s leadership has been remarkably adaptive, and one of the primary lessons of 1989 and the collapse of Communist Eastern Europe was that you can stay in power as long as you can deliver material goods, and I believe they will use every fen at their disposal to keep delivering the goods, even if it means sending tractor loads full of RMB notes to every village in China. The other take away from the collapse of Communist Eastern Europe was that no one wants to be the Chinese Ceaucescu, and the government will use every hard and soft tool at their disposal to maintain order and prime the economy. When China comes out the other side of this downturn I think it is quite possible we will see much bigger bubble here than the one that just ended, given how much RMB is going into the system. Some very smart people I know are planning to back up the truck to China A-Shares whenever the Shanghai index hits 1,500.
My best published sources of information on China’s economy are Caijing Magazine and Caijing.com, Bloomberg.com, and Michael Pettis’ blog.
Your Twitter posts are one of the most well-informed and eclectic about news. How many websites do you browse and do you have a system?
Thanks. I am a big user of Google Reader, with probably 400+ feeds in there, maybe 100 of which are in Chinese. You can follow my shared feed.
I would have more Chinese feeds if more Chinese sites would use RSS, but for some reason their RSS adoption lags behind that of their foreign peers. I also have lots of friends and acquaintances who like to talk. I’d guess most of my tweets are about China, with markets-related ones second. In many ways I think Twitter has helped me regress to my Baltimore Sun clipping days, but to the extent that I can point people to interesting and educational things about China, and I am glad to do so, especially whilst I have some free time. Some journalists here read my shared feed, and I am happy to help as a part-time, volunteer “assignment editor”. I think augmenting western mainstream media coverage is a good thing, and fortunately there are some great blogs on China, like Danwei for example.